Order growth at German factories undershoots forecasts in September

Order growth in German factories undershot economists' forecasts in September, despite solid readings for auto and capital goods orders.

According to the Federal Office of Statistics, in seasonally and calendar-adjusted terms, new manufacturing orders grew at a month-on-month pace of 1.3% (consensus: 1.8%).

Furthermore, August's tally was revised down to show a drop of 8.8% on the month, against a preliminary reading of -7.7%.

"Overall, this is a tepid rebound after the crash midway through Q3, leaving new orders some 7.5% below its previous high in July, though also still significantly above its level before the virus, by 8.6%," said Claus Vistesen, chief euro area economist at Pantheon Macroeconomics.

Domestic orders were weak in September, falling by 5.9%, while those from other euro area countries dropped by 7.3%, although orders from outside the single currency bloc jumped by 14.9%.

As Vistesen had pointed out, when compared to February 2020, the month before Covid-19 restrictions were imposed, orders were up by 8.6% in calendar adjusted terms, and 10.4% higher versus a year earlier.

Orders for motor vehicles increased by 9.6% on the month in September and those for capital goods by 3.9%, whereas orders for intermediate goods fell by 2.0% and those for consumer goods by 1.7%.

Nevertheless, Vistesen highlighted the boost from major orders of mechanical engineering goods, which he said drove the total up for that chapter by 12.2%, as well total new orders, whereas without them, orders for mechanical engineering goods would have risen by 6.7%.